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Panama considers wider, deeper appeal for canal

A cargo ship arrives at one of the three locks of the Gatun Lake in the Atlantic gate of the Panama Canal.

KAI RYSSDAL: The French started it, Theodore Roosevelt finished it and now the Panamanians are thinking about expanding it. There's a referendum Sunday down in Panama — the canal's on the ballot. The government's proposing a $5.25 billion expansion so the canal can accommodate the newest and the biggest ships.Carlos Barnes finds himself in a pretty good spot. He's the exclusive Panama rep for Caterpillar, the bulldozing company.

CARLOS BARNES The traffic through the canal is getting to a point where the canal will be obsolete in the next five, six years.

RYSSDAL: Do you think, Mr. Barnes, that Panamanians, when they think about the canal, do they consider it sort of as the Saudis must do with oil for their country. A strategic asset that's vital to the economy?

BARNES: Well, the Panama Canal is the largest operating institution, business-wise, for Panama. For the last few years, the canal has reported profits of over $500 million to the government of Panama. We expect that this revenue to the government should be doubled when the new canal expanded is in operating conditions.

RYSSDAL: One of the things the No voters are saying, though, sir, is that there's $5 billion in largely unaccounted funds, and that corruption in the Panamanian government makes them not really believe that that money is going to be spent to improve the canal.

BARNES: Well, those that say so don't understand the Canal Authority Organization. The Canal Authority Organization is separate from the government itself. And the operation of the canal has been praised internationally as a well-run organization, and we do not expect that this situation changes.

RYSSDAL: What's happening down there now? Are there businesses, such as your own — Caterpillar — that makes earth-moving equipment. Are there companies just waiting to get in on this, what's going to be a huge construction project?

BARNES: We're getting ready for a busy run of five or six years. We expect to be ballplayers on the canal project. We expect to invest no less than $75 million on training our mechanics, and our facilities will be kind of doubled when this project is actually going on.

RYSSDAL: Carlos Barnes runs the exclusive Caterpillar dealership down in Panama, and we spoke to him from Panama City. Mr. Barnes, thanks a lot for your time.

BARNES: OK. Thank you for calling.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.

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